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Opinion

Commentary: WaMu's bad bet hurt customers

The (Tacoma) News Tribune

October 28, 2009 11:43 AM

Kerry Killinger said he wanted to create the Wal-Mart of banks. He attempted to do it in a curious way, by ruining the very customers he said he wanted to serve.

The spectacular train wreck that was Washington Mutual continues to be dissected a year after the 119-year-old institution became the nation's biggest bank failure.

The latest study is The Seattle Times' two-part report this week that offers a case study of how fast greed can turn a good company bad.

It lays much of the blame for the company's collapse on a reckless business strategy CEO Killinger and other executives launched as late as 2003. The idea was to boost profits by marketing risky and overpriced loans to borrowers

The tactic bared a blatant disregard for the bank's customers and a stunningly myopic business plan.

Late last year, The New York Times detailed how WaMu's once-responsible corporate culture morphed into a three-ring circus of liar-lending. Borrowers were allowed, even encouraged, to exaggerate their income and creditworthiness.

But the company wasn't just capitalizing on borrowers' greed; it was manufacturing its own.

To read the complete editorial, visit The (Tacoma) News Tribune.

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